Why the talk about the inflation rate is misleading

From the beginning of July to the end of September, prices rose by only 0.5%. What doesn’t make sense is to use the 12-month rate — 8.2% — to claim that the current level of inflation is either rising or falling.

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Editorials

November 17, 2022 - 2:40 PM

U.S. President Joe Biden delivers remarks on lowering costs for American families at Irvine Valley College in Orange County on Oct. 14, 2022, in Irvine, California. (Mario Tama/Getty Images/TNS)

Inflation is a hot-button issue, and its political fallout can be huge. Some think that the hyperinflation during Germany’s Weimar Republic in the 1920s — when, at a trillion to the dollar, the German mark literally was not worth the paper it was printed on — contributed to the rise of Adolf Hitler. Current U.S. inflation is not remotely comparable, but pollsters say it helped to sway voters in the midterm elections in favor of the Republicans.

We hear that inflation is “soaring” not only on Fox News but also in the pages of the New York Times. We are told that the inflation rate has remained “stubbornly high” at 8.2% over the past 12 months.

Yet the inflation rate in recent months tells a very different story. From the beginning of July to the end of September, prices rose by only 0.5% — equivalent to an annual rate of about 2%.

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